LiveDeal Inc. (Nasdaq: LIVE), which is part-owned by private equity firm Isaac Capital Group, is buying an 80 percent stake in high-end flooring company Marquis Industries for $31.4 million in a leveraged buyout.
Marquis' owners, who are looking to retire in the next three to five years, rolled over 20 percent of their equity, according to Armando Soto, a managing director at Isaac. Marquis, headquartered in Dalton, Georgia, is a carpet yarn manufacturer and hard surface reseller.
LiveDeal is making the acquisition through a subsidiary, Live Ventures Inc., which has set out to acquire profitable companies. Marquis' sales reached $60 million for 2014, with about $8 million in trailing 12-month Ebitda. The parent is a Las Vegas-based marketing company that aims to connect merchants and consumers through geo-location technology.
Isaac, a San Diego-based firm that sourced the Marquis deal out of its New York office, plan is to pay down debt aggressively for the next 18 months, and then look to grow organically and through add-on acquisitions, Soto says. The firm owns 65 percent of LiveDeal.
The firm put down $6 million as a down payment, and took out a $16.5 million loan from Bank of America at Libor plus 200 basis points, and then formed a joint fund with Marquis to provide the junior debt. "We'll be looking to refinance that through a traditional mezzanine lender in the next 120 days," Soto says.